Warm weather could hurt Russian fossil fuel generators, help RusHydro

By bne IntelliNews February 6, 2020

Russia’s electricity consumption in January declined by 3.3% year on year due to warmer weather, according to the system operator statistics. 

“Though the statistics refer to one month of 1Q20 only, if weather conditions do not
change in February-March, 1Q20 y/y dynamics may be quite weak for fossil fuel generating companies – InterRAO, OGKs and TGKs,” BCS Global Markets commented on February 6.

As reported by bne IntelliNews, Russian utility names are being closely watched by investors since the start of 2020, and are considered a strong Buy.

Warm weather could be beneficial for RusHydro, the hydropower major. While in January  fossil fuel gencos' output was down 9% y/y, hydro production was high at 18% y/y growth.

BCS Global Markets also noted that electricity spot market y/y dynamics in January were sluggish - for the European zone, prices fell 6.6.%; for Siberia they were down by 7.7%. RusHydro previously showed 15% output growth in 4Q19, with particularly strong performance and prices for hydro generation in central Russia.

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